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ARM 401 Miscellaneous Exam Questions with Correct Answers
ARM 401 Miscellaneous Exam Questions with Correct Answers
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ARM 401 Miscellaneous Exam Questions withCorrect Answers
1. Indenture levels - Correct Answer - Air-Freight Company wants to use failure mode and effects
analysis (FMEA) to analyze its systems, subsystems, components, sub-assemblies, and parts. Level 1 is
the overall system for shipping freight. Level 2 is the system segments, with the prime items (air freight
hubs, schedulers, and logistics) designated as Level 3. Level 4 is the subsystems (local freight handlers,
package sorters, etc.). Level 5 is the hardware and parts (forklifts, conveyor belts, planes, and delivery
vans, etc.). In FMEA, these various systems and subsystems are called
A. Critical levels.
B. Indenture levels.
C. Complexity levels.
D. Risk priority levels.
2. One way of presenting a continuous probability distribution is to divide the distribution into a
countable number of bins. - Correct Answer –
Which one of the following statements is correct with respect to continuous probability distributions?
A. One way of presenting a continuous probability distribution is to divide the distribution into a
countable number of bins.
B. There are a finite number of possible outcomes in a continuous probability distribution.
C. They are typically used for loss frequency analysis rather than severity analysis.
D. They are most effectively illustrated using tables and pie charts.
B. To perpetuate a competent board through regular elections - Correct Answer –
Which one of the following is a major responsibility of corporate directors?
A. To manage investments and disbursements of the corporation's assets
B. To perpetuate a competent board through regular elections
,C. To establish the procedures and operational goals for each department
D. To create the proper annual and interim reports for shareholders
D. The risk treatment opportunity to further reduce risk. - Correct Answer –
The risk management department at Computer Hardware Company uses risk maps to graph and
analyze the risks faced by the company. One area of special concern to the risk management team is the
difference between residual risk and optimum risk. This difference represents
A. The risk that cannot be altered and is retained by the firm.
B. The potential risk that the organization does not currently face, but could face if conditions change
C. The risk that is handled, by default, through avoidance.
D. The risk treatment opportunity to further reduce risk.
A. Purpose. - Correct Answer - Decision tree analysis and event tree analysis are similar in a number of
ways, but differ in their
A. Purpose.
B. Process.
C. Appearance.
D. Approach.
A. The Delphi technique. - Correct Answer - After a month in which three employees were seriously
injured at company paper mills, Ashley, the risk manager of Bright White Paper Company, wanted some
answers about the causes of employee injuries. Ashley independently contacted the plant manager and
foreman at each of the company's plants. She asked each person to complete a confidential
questionnaire regarding safety procedures. After receiving the responses to the questionnaire, Ashley
summarized the results and asked the same questions again instructing each person to consider revising
their responses based on the initial questionnaire results. The analysis revealed that new workers were
not being properly trained and that a lax attitude toward safety was present at the majority of the
plants. The team approach to risk identification Ashley employed is called
A. The Delphi technique.
B. Scenario analysis.
C. SWOT analysis.
D. HAZOP analysis
, D. Because of their security, blockchains can eliminate the need to verify the accuracy of risk
management data. - Correct Answer - Which one of the following is a major benefit that blockchain
technology provides to holistic risk management?
A. Blockchain technology allows organizations to share data through wireless internet and networking
services.
B. Blockchain technology can monitor driving habits by measuring acceleration, speed, braking, and
distance traveled.
C. Blockchains can monitor things such as heat, moisture, noise, and air quality.
D. Because of their security, blockchains can eliminate the need to verify the accuracy of risk
management data.
C. Identify the various ways of interrupting the sequence of events leading to system failure so that the
failure itself can be prevented. - Correct Answer - The purpose of fault tree analysis is to
A. Project consequences of some failure of a system component.
B. Quantify the probability of each possibility identified in the analysis.
C. Identify the various ways of interrupting the sequence of events leading to system failure so that the
failure itself can be prevented.
D. Provide an opportunity to discover and correct any defects in a product or process while it is still in its
early engineering phases.
D. Closeness - Correct Answer - Tom, the regional manager at Westfork Mutual, has planned a
community service day for all employees. He has asked his two assistant managers, Julian and Leah, to
spread the word to other employees and encourage them to attend. Based on centrality measures of
the company's email traffic, Tom is confident that Julian will spread the word to more employees more
quickly through email than will Leah. Tom's confidence is based on Julian's high score in which one of
the following centrality measures?
A. Degree
B. Betweenness
C. Association
D. Closeness
B. Hazard and operability (HAZOP) study. - Correct Answer - Home Appliance Company has decided to
change its production method. Previously, small teams of workers assembled washers, dryers, and
dishwashers. Under the new production method, an assembly-line will be used, with some functions
performed by robotics. Before making the change, Home Appliance Company has created a team of
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